Correlation Between AEX Amsterdam and AMS Small
Can any of the company-specific risk be diversified away by investing in both AEX Amsterdam and AMS Small at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AEX Amsterdam and AMS Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEX Amsterdam Index and AMS Small Cap, you can compare the effects of market volatilities on AEX Amsterdam and AMS Small and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AEX Amsterdam with a short position of AMS Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEX Amsterdam and AMS Small.
Diversification Opportunities for AEX Amsterdam and AMS Small
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AEX and AMS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AEX Amsterdam Index and AMS Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMS Small Cap and AEX Amsterdam is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AEX Amsterdam Index are associated (or correlated) with AMS Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMS Small Cap has no effect on the direction of AEX Amsterdam i.e., AEX Amsterdam and AMS Small go up and down completely randomly.
Pair Corralation between AEX Amsterdam and AMS Small
If you would invest 119,889 in AMS Small Cap on March 13, 2024 and sell it today you would earn a total of 5,654 from holding AMS Small Cap or generate 4.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
AEX Amsterdam Index vs. AMS Small Cap
Performance |
Timeline |
AEX Amsterdam and AMS Small Volatility Contrast
Predicted Return Density |
Returns |
AEX Amsterdam Index
Pair trading matchups for AEX Amsterdam
AMS Small Cap
Pair trading matchups for AMS Small
Pair Trading with AEX Amsterdam and AMS Small
The main advantage of trading using opposite AEX Amsterdam and AMS Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEX Amsterdam position performs unexpectedly, AMS Small can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AMS Small will offset losses from the drop in AMS Small's long position.AEX Amsterdam vs. AMG Advanced Metallurgical | AEX Amsterdam vs. FL Entertainment NV | AEX Amsterdam vs. Vastned Retail NV | AEX Amsterdam vs. Sligro Food Group |
AMS Small vs. AMG Advanced Metallurgical | AMS Small vs. Allfunds Group | AMS Small vs. Reinet Investments SCA | AMS Small vs. Universal Music Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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